PLAN103 Chapter Notes - Chapter 6: Allocative Efficiency, Price System, Externality
23 Mar 2016
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Spatial expansion on fringe occurs when land is more valuable for residential than agriculture, economists view this as efficient and market is making highest and best use. Decentralized is led by market conditions of market growth, rising incomes and falling commuting costs as well as the rent gradient which has prices fall as they get farther. Natural evolution: confluence of rent gradient, good transport infrastructure, suburban job market, can also be from poor quality of life in cities which force wealthy out. Both flight from blight and natural evolution are linked to suburbanization. Too much suburbanization can happen, sprawl is excessive growth of cities means that not all suburbanization is sprawl. Market failure of sprawl is how agents face incentives distorted from institutional failing that lead to bad economic outcomes for society: mispricing of services and especially car use in urban areas leads to this failure.
